The Getty Museum has reached out to major donors seeking a financial infusion much to the concern of other California-based nonprofits in the same geographical area. The fear expressed in The Art Newspaper is that the Getty request for funding will drain funds otherwise intended for less well-funded museums in the area.

The December tax reform bill preserved the position that private foundations were prohibited from owning more than 20% of for-profit companies for more than five years. Private foundations in violation of this provision faced a 200% tax on the foundation’s assets. Newman’s Own Foundation, which owns a subsidiary company that produces and sells food products to the public to generate money for its charitable programs, was saved from the provision as a result of an amendment placed in the budget bill by Connecticut Senators Blumenthal and Murphy.

Louisiana no longer requires that charities submit registration renewals by October 1st of each year. The new policy is a rolling annual renewal based on the date of registration. For example, if a charity registered on May 15, 2017, their renewal would be due May 15, 2018.

Source: State of Louisiana Department of Justice Letter to this Office dated January 30, 2018.

Massachusetts

In order to stave off insolvency, the Berkshire Museum wanted to sell some of its artwork collection. Under an agreement reached with the office of the Attorney General, the museum will be allowed to sell dozens of its art works to private collectors. However, one famous Norman Rockwell painting will be sold to another museum which has agreed to maintain it on public display. This agreement has been met with immediate objections and is still subject to court approval.

The Federal Appeals Court for the Second District has held that the state of New York can require Citizens United to list donors as part of the registration process. The state asserted that all such disclosures are confidential and not part of the public record. The First Amendment challenge was based on precedent (NAACP v. Buttons), but the Court found that donors to this plaintiff did not have the same risk as the donors to the NAACP when that case was heard. Citizens United is now considering an appeal to the United States Supreme Court.

Commentary: New York and California require charities to file Schedule B. The movement to enforce these kinds of requirements was really centered in California which claimed that outside interests were funding in-state advocacy groups to impact legislation.

As we have reported over the years, some of the nonprofit art museums have either decided to or been forced to sell parts of their collection in order to sustain their existence. Most recently, LaSalle University has proposed to sell 46 of its pieces of art, hoping to raise as much as $7 million. The proposal is called part of the University’s strategic five-year plan. However, those in the industry have grave concerns over museums selling collections. The American Alliance of Museums and the Association of Art Museum Directors issued a joint statement opposing any such sale. One of the concerns is that donors who see collections sold will be far less likely to make significant donations of works of art to museums.

The Postal Regulatory Commission agreed with the Alliance of Nonprofit Mailers and over 80 other nonprofits that wrote letters. The United States Postal Service will not be allowed to change the calculation of the percentage ratio between nonprofit and commercial marketing mailing rates. Had the proposal been allowed to go into effect, it would have resulted in a 4.2% increase. The Alliance of Nonprofit Mailers estimates that this decision translates into a $61.5 million per year savings for nonprofit postal users.

Greg Lam, a partner in the firm, was recently elected to the Board of Directors of the TEGE Exempt Organizations Council. This Council is a consolidation of the old regional Exempt Organization Councils into a National TEGE Council. The “old” regional model for TEGE Councils was strong, but is no longer supported by the IRS. The TEGE Exempt Organizations Council will continue to serve exempt organization legal and accounting practitioners by providing and maintaining open lines of communication between the Tax Exempt & Government Entities Division of the Internal Revenue Service and the practitioner community. The Council will also continue as a liaison with the IRS by providing the TEGE Division of IRS with the thinking of the practitioner community on procedural and systemic matters, providing practitioners a forum to share their concerns with the IRS regarding both policies and specific tax issues and procedures and educating the practitioner community and the exempt organizations community.

Copilevitz, Lam & Raney, LLC

Copilevitz & Canter is a national law firm that has dealt with every state and federal law and regulator so we can perform services more effectively, quickly and affordably than general counsel. We represent tax-exempt organizations, professional fundraisers, commercial telemarketers and political callers in all aspects of First Amendment law. We are the nation's largest provider of state charitable fundraising registration services.